Bend the Boat Like Beckham

It is often said in markets that the trend is your friend until it bends in the end. 

Small caps sure seem to have been "bending," but not breaking, in recent sessions. The higher beta issues in the Russell 2000 Index have lagged their senior counterparts at various junctures over the last few weeks, prompting bears to call for an imminent market breakdown.

While that breakdown sure seems to be taking its sweet old time (look no further than the VIX ETFs barely budging or even holding red), the IWM (ETF for the Russell) hourly chart, below, zoomed-out a few weeks to capture the bend, illustrates the underperformance to, say, the Nasdaq. 

The Russell boat may be bending, but whether it will capsize remains to be seen. However, in spite of NFLX, the big railroad plays, and select strength in 3D printing stocks and opticals, the action is rather weak today and may very well be hanging on to see if small caps merely keep bending, or actually brea this time.